A home is the ultimate investment for an individual. As such it makes a lot of sense to ensure its safety and upkeep. Further to this the market today offers numerous home insurance plans to suit various requirements.

 Home insurance covers natural and man-made calamities including fire, earthquake, lightning, floods and explosions among others. You can choose to buy insurance for only the building or only the contents or both.

Some of insurance companies offering home insurance include ICICI Lombard (Home Gold Plan), HSBC (HomeSecure), The New India Assurance Company (Householders Policy) and Bajaj Allianz (Householders).

Insurance companies come out with different home insurance policies to suit the unique needs of their customers. While some policies have a standard/fixed cover, others are flexible package, including a basket of coverage(s). The premium for such covers is higher than the standard cover. This is because the risk of the company insuring is more. Insurance companies offer various kinds of covers.

For instance, the burglary cover for the contents of your home are covered against loss due to burglary or an attempted burglary. It also covers loss of jewellery, silver articles and precious stones kept under lock and key, subject to conditions. Optional covers include terrorism cover for damages and losses to the structure and/or contents of your home due to acts of terrorism. Additional expenses of rent for alternative accommodation are covered. If you are forced to shift into an alternative accommodation because your home is destroyed or damaged by any insured peril, the policy will cover you against the additional rent.
 
How it is assessed
Assessing the value of your home structure is a key in home insurance. Normally the area is assessed as per the area of your home multiplied by the rate of construction per square foot, as on the date of taking the policy. For example, if your home is 1,200 sq ft and the construction rate per sq ft is Rs 1,000, then the sum insured for your home’s building structure is Rs 12 lakhs. Contents are assessed on the market value of the items. This means that if there were a loss, the claim would be paid on the value of purchasing a similar new item, less depreciation for the usage.

This includes household appliances, furniture, jewellery, personal effects and miscellaneous items. A property more than 50 years old is not insured. Another point considered while insuring a home is that companies only consider permanent construction. Keeping the above factors in mind, an individual has to pay the premium every month/quarter/six months according to the sum insured. The factors to be kept in mind while calculating the insurance premium and accepting the home insurance quote being offered by the home insurance company include area of the property (calculated in sq ft), location and neighbourhood, approximate rate of construction and permanent construction on the land.

Facts about figures
Normally the insurance policy is very specific on what is covered and what is not. It is always advisable you read the fine print for details on the policy. Normally there is no liability for loss or damage by the insured and/or insured’s domestic staff’s direct or indirect involvement in an attempted burglary.

Under Section 1 (B) the Householder's Insurance policy, any loss or damage suffered to the following is treated as an exception and cannot be claimed. These include consumable articles, money/ securities/ stamps/ stamp collection, bullion and livestock, motor vehicles and pedal cycle, deeds/ bonds/ bills of exchange/ promissory notes/ shares books/ manuscripts, loose precious stones, jewellery and valuables.

If the property is sold and if the new owner of the house wants to continue the cover, the insurance company might issue an endorsement on the name of the insured and pass the policy in the name of the current owner of the house. The claim settlement procedure in home insurance includes personal information like the contact details, details of the policy undertaken and inspection of the site by the company appointed surveyor.

The claim is processed within two weeks of the complete documentation. Approval of the claim letter is sent to the claimant with the settlement amount approved and payment of the home insurance claim cheque. The home insurance companies follow a fixed procedure to settle the insurance claim. You are required to submit completed documents in order to fasten the claim procedure. These include duly completed and signed claim form, copy of the FIR, a final police report, copies of all invoices, price lists and letter of indemnity. So remember to insure your home and let go of your worries.